When an Auditor Agrees to Perform an Audit Because the Preconditions

question 83

Multiple Choice

When an auditor agrees to perform an audit because the preconditions for an audit have been met and the auditor believes that he can gather sufficient appropriate audit evidence to reduce audit risk to an acceptably low level,an engagement letter is prepared.The engagement letter includes:

• A)arrangements regarding the planning and performance of the audit,including the composition of the audit team.
• B)the basis on which fees are computed are based on an unqualified audit opinion.
• C)arrangements concerning the opinions of other auditors and specialists in the audit.
• D)arrangements concerning the opinions of internal auditors and other staff of the company.
• E)arrangements to be made with the predecessor auditor in the case of a follow up audit.

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Definitions:

Social Security

Social Security is a government program that provides financial assistance to people with inadequate or no income, including retirees, disabled people, and their families.

National Income

National Income is the total value of all goods and services produced by a country's economy over a specific time period, plus income from abroad, minus income remittances to other countries.

GDP

Gross Domestic Product, it measures the total economic output of a country, representing the market value of all goods and services produced over a specific time period.

Per Capita

A statistical measure that divides an aggregate by the number of individuals in the population, commonly used to express economic indicators.